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Those of us with ISAs are dropping short of our total annual tax-free allowance
With the end of the current tax year fast approaching, new findings from Alliance & Leicester Savings show that although more than one in two people (54%) have an ISA, almost two thirds (64%) of them have invested nothing since April 2004. Furthermore, those that have put savings into their ISA this year have invested an average of just £871.21, leaving them £6,128.79 short of their total annual tax-free allowance.
As part of its quarterly study, Alliance & Leicester’s Wealth Tracker Index asked a GB representative sample of 2,000 people whether they held an ISA over the 2004/05 tax year, and if so, how much had they put away.
Key findings:
With an average investment of £871.21, more than one in ten (11%) have invested up to £1,000 so far this tax year, a further 15 per cent have tucked away between £1,000 and £3,000.
Almost two thirds (62%) of fifty-somethings currently hold an ISA. They have also invested the most over the current tax year an average of, £1,133.47.
There’s a fairly even split between the numbers of men and women who have put money in an ISA during this tax year – 55% and 54% respectively. There is, however, a large difference in the average amount of cash men and women have saved – on average men have saved £1,028.07 so far, compared with £710.56 saved by women.
Regional findings:
People in the North are the least likely to have opened an ISA during the current tax year. As many as 60 per cent don’t have an ISA, compared with just 27 per cent of people in Wales.
Despite having the greatest level of take-up, 72 per cent of the Welsh have not invested a penny in their ISAs since April 2004, compared with a third (33%) of ISA–holders in the East Midlands.
People in the East Midlands have invested the most in their ISAs, putting away an average £1,753.65 since April 2004. Whereas Northerners have taken advantage of their tax-free allowance the least – investing on average £385.09 since April 2004.
Nathan Barber Kebby, Marketing Manager for Savings at Alliance & Leicester said: “Although our findings show more people are now putting something into their ISA, it’s clear they’re not making the most of the tax-advantages available. With the choice of investing in cash or stocks & shares, there is no reason why people should miss out on their annual tax-free allowance. For many, Mini Cash ISAs offer attractive interest rates and safety for their capital, while a Stocks & Shares ISA could offer higher growth potential over the longer term.
“It’s important that people are aware of the tax benefits of investing their money in an ISA. I would recommend that customers speak to a Financial Adviser, before deciding on which savings vehicle best suits their needs.”
ISA directory:
High Interest ISA directory
Wednesday, March 02, 2005
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